You can already do voice over Wi-Fi, with Skype, the world's most popular
free VoIP application. "But if you want to be mobile, you need a dual mode
handset," notes Monica Paolini, founder of Senza Fili Consulting (senza
fili means wireless in Italian).

The company has just issued a report on dual mode technology called "UMA and
Beyond: Mobile Operators Benefit from Wi-Fi and Cellular Convergence." UMA,
which stands for Unlicensed Mobile Access, is an
initiative by cellular operators to ensure that handsets are designed well,
according to open standards, and available for a reasonable price.

Paolini says that pricing will be very important because it will determine
the rate of adoption. Battery life, she suspects, will also be very important.
"It has two radios, so by necessity it has a diminished battery life compared to
a GSM/GPRS phone. The question is whether the battery life is acceptable or
whether you have to go around carrying a charger."

For UMA in particular, price will be key because the UMA group has chosen to
target residential rather than business users. "I found this surprising. You
would think that the target would be enterprises and hotspots, but UMA is aimed
at the residential market."

She says it's not unreasonable. When handsets become generally available,
which she predicts will occur in 2006, she expects there to be a real demand for
the service. "In the U.S.," she says, "cellular coverage at home is poor. It is
not unusual to have no cellular coverage at home."

Once the mobile operator sells cell phone service into the home, the operator
will want the customer to have an access point that can handle QoS issues,
prioritizing voice packets. Access point manufacturers would benefit from this,
if it happens.

And the ISPs

Will hotspot owners benefit from
UMA? In general, Paolini thinks not. The one cellular company that also owns a
lot of hotspots is T-Mobile. "I've been looking at where people make calls, in
terms of usage, and people are not going to drive to Starbucks to make a phone
call," she says. "Typically, they have a lot of minutes. It may be attractive
for someone who's making a long, business-related conference call, but typical
calls on a cell phone are not long. Few of us do conference calls. Of course, it
may be a good selling point to the consumer, and those subscribers who do use it
will like it."

She says that it would be particularly valuable to the jet set. "If you're
traveling internationally to Europe or Japan, you would use it. Japan is more
interesting, because there you can use your GSM phone at a hotspot and nowhere
else. You can use your GSM phone in Europe, but for a price. You might need to
pay 10 Euros to use the hotspot, but the alternative would be to pay $1 per
minute for your phone call to the United States."

The opportunity for ISPs may be limited. Large last mile operators could work
with mobile providers to provide QoS for the mobile operators' subscribers, but
the mobile companies may also be competing with the broadband providers.

She suspects that some WISPs will be able to differentiate their service by
offering QoS. "If you used the early VoIP services, like very early Vonage, you
know what VoIP is like without QoSS. It would be interrupted by your own
traffic. You see a 5 MB e-mail start to download, and you'd know your phone call
was about to be cut off." Sounds like something people would pay to avoid.

Companies respond

Related Articles

Of course, Vonage and even
the fixed line divisions of the RBOCs are preparing for this threat. Our
colleage Joe
Laszlo, senior analyst at Jupiter Research, points out that Vonage recently
announced plans to offer a Wi-Fi phone. An article in The
Feature says this might allow Vonage to compete with cellular providers.